Construction Contract Provisions that are Statutorily Void and Unenforceable in Arizona

sign-40599_150In an earlier post, I addressed the statutorily-required minimum elements of Arizona construction contracts between contractors and property owners.  As a reminder, those minimum elements are set forth in A.R.S. § 32-1158(A).  This post will, however, address the other side of that same coin—namely, the relatively few construction contract provisions that are statutorily void and unenforceable in Arizona.

First, A.R.S. § 32-1129.05(A) provides that the following are against Arizona’s public policy and are void and unenforceable: read more

Hatch Development, LLC v. Sol’s Construction Co., Inc.: A Primer on Common Law Indemnification

common_law-indemnification

***UPDATE – 2/12/2018*** 

The Court of Appeals’ decision in  Hatch Development, LLC, et al. v. Sol’s Construction Co., Inc., 240 Ariz. 171 (App. 2016), which is the subject of this post from November 2016, is no longer good law.  The decision in Hatch was abrogated by the Arizona Supreme Court’s February 8, 2018 opinion in KnightBrook Ins. Co., et al. v. Payless Car Rental System, Inc., No. CV-17-0156-CQ.  

Indemnification provisions are mainstays of most construction contracts. As a result, all contractors should be aware that the agreements they enter likely impose certain indemnification obligations upon them.  But even the most seasoned contractors may not realize that construction contracts are not always the final word on indemnity.  Rather, certain indemnification obligations can arise purely as a matter of law, even if the parties’ contract is silent on the issue.  This is what is referred to as “common law indemnification,” and it was the subject of the Arizona Court of Appeals’ recent decision in Hatch Development, LLC, et al. v. Sol’s Construction Co., Inc., 240 Ariz. 171 (App. 2016). read more

Beware of No-Damages-for-Delay Clauses

IMG_0284It has been several months since I last published a blog entry.   My term as the President of the Scottsdale Bar Association and a particularly busy period in my practice have recently left too few hours in the day for blogging.  But now that my term has ended, I intend on resuming my regular posts.  In light of my time away, I thought it only fitting that this post cover some aspect of delay.  I will, therefore, address in this post the often controversial “no-damages-for-delay” clause. read more

The Rare Cardinal Change

file0001201427690 A “cardinal change” has nothing to do with the football team, the baseball team, or, for that matter, the bird.  It is, instead, an important legal concept for contractors to understand.  Where applicable, the cardinal change doctrine puts limits on the amount of changed work or extra work that can be ordered under the changes clause of a construction contract.  I recently dealt with the doctrine in connection with my practice.   Here are the basics.

Cardinal Changes Defined. read more

A Lesson on Pay-if-Paid Clauses

pay-if-paid clausesNot too long ago, I litigated a case that turned on the enforceability of a pay-if-paid clause.   The very good attorneys on the other side argued that the clause at issue was enforceable, such that it excused their general contractor client’s failure to pay.  I argued, on behalf of my subcontractor client, that the provision was unenforceable.  The trial court agreed with me on summary judgment, which led to a very favorable settlement for my client.

So what was wrong with the clause the parties were fighting over? Among other things, I argued that it did not comply with the requirements set forth in L. Harvey Concrete, Inc. v. Agro Const. & Supply Co., 189 Ariz. 178, 939 P.2d 811 (App. 1997).  L. Harvey is the seminal Arizona case on pay-if-paid clauses.  It holds that pay-if-paid provisions are enforceable if they meet the following three requirements: read more